[StBernard] EDITORIAL: Louisiana's Better Bet; Gov. Blanco is not willing to fool with Mother Nature

[Westley Annis]

EDITORIAL: Louisiana's Better Bet; Gov. Blanco is not willing to fool with Mother Nature


Periodically, the press office will publish editorials and columns that feature Governor Blanco's work in various areas. 

The Washington Post: Louisiana's Better Bet; Gov. Blanco is not willing to fool with Mother Nature
<http://www.washingtonpost.com/wp-dyn/content/article/2007/03/23/AR2007032301643.html> 

Published Saturday, March 24, 2007; Page A16


Louisiana has an insurance problem. Ever since the devastation of Hurricane Katrina, the industry has dropped customers, raised premiums and threatened to leave the state. Given Florida's extensive hurricane experience, it's only natural that Gov. Kathleen Babineaux Blanco (D) would look there for ideas. But after careful examination, Ms. Blanco told us, "We're not going to mimic Florida. They have taken on an extraordinary amount of risk." Louisianans should breathe a sigh of relief.

What Florida did was bet against Mother Nature with a plan that is neither fiscally sane nor environmentally smart. The state-run insurance company expanded its portfolio of policies to include fire and theft -- the better to spread the risk. And the threshold for troubled insurers to get at the state's catastrophe fund was lowered while the upper limit on the state's liability after a major storm was doubled. This makes it attractive for people to call their very own dangerous piece of hurricane alley home -- much to the delight of developers. Never mind that Florida has nowhere near enough money to cover all the promises made to insurers and taxpayers. If the big one hits, they're out of luck.

Ms. Blanco wants to follow a different path. Rather than add to Louisiana's state-run insurance program, she'd like to find a way to get the private market to take on those policies. And she would like to create tax incentives for homeowners to protect their residences against wind damage. This and other ideas being considered by the governor will be debated when the Louisiana legislature convenes April 30.

Since Hurricane Katrina, Louisiana has moved to make itself a safer bet for insurers. The state adopted the international building code, considered the toughest in the world. The crony-laden levee boards have been consolidated and reorganized to include professionals with real experience in flood control. And revenue from oil rigs off the coast will go to a dedicated fund for coastal restoration. Without barrier islands to slow them down, hurricanes will surge unimpeded to the mainland.

The goal is simple: Make Louisiana more attractive to insurers by limiting the damage from hurricanes. This not only reduces risk, but it also increases competition, which leads to lower rates. That's the best kind of insurance reform.

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The Louisiana Disaster Recovery Foundation
Louisiana's Fund for Louisiana's People
www.louisianahelp.org